Market's evolution 02 of January to 06 of January 2017

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Monday, 09 of January 2017

Market's evolution 02 of January to 06 of January 2017

We have celebrated the end of the festivities and the new year began with widespread progress in the equity markets.

Despite the semi-festive week, we have been able to count with relevant macroeconomic indicators. The main those ones published in the Euro Zone were the PMIs and the price indices, which surprised upwards.

The leading indicators maintained the expansive rates above 50, which leads us to anticipate economic growth for the new year, while prices surprised with rises after presenting consumer price levels of +1,1% (above the expected). With this, the members of the European Central Bank declared that the forecasts of inflation would be modified upwards.

Weekly closures ended with widespread gains among which we highlight the +1,75% recorded by the IBEX35 (ending Friday's session at 9.515 levels), followed by the DAX and the EUROSTOXX50 which scored a +1% closing around 11.599 and 3.321 respectively.

We are now waiting for further meetings in the European Union with the United Kingdom. The last known event was the resignation of the UK ambassador from the EU unexpectedly one month before the negotiations to settle the conditions of a Brexit starts. Nonetheless, macro developments continued to be positive, benefiting from a more competitive pound.

In the US, the minutes of the last FOMC’s meeting were published, where concerns about the effects that Donald Trump's policies might have on the economy raised, as this could lead the organization to increase interest rates more in a more aggressive way. So far, activity in the region maintained expansive rates, and although the latest employment data published was worse than expected (153.000 new jobs created compared to the expected 170.000 jobs), the economy continued to show strength so it is expected that growth level rates were maintained together with a level of unemployment in minimum rates.

Selectives maintained their highs with new gains around the +3% on the Nasdaq-100 closing in the 5.007s while advances on the S&P500 were somewhat more moderated (from +1,70% now around 2,276) .

From Asia, new capital controls had been established in China: citizens will be required not to convert yuan into foreign currency in order to buy property and brake capital fights, while the Japanese minister called on employers to raise salaries to their employees to stimulate the economy.

Markets closed in green after posting gains of +2,28% in Chinese selective Hang Seng raised to 22.503 and +1,78% in the Nikkei225, now at levels of 19.454.

We do not highlight significant changes in the currency markets, the EUR/USD remained at levels of the 1,053 and the EUR/GBP at around 0.857.

Stability also in commodity prices, without changes in the price of the Brent barrel which remained stable at 57 USD/Brent.